Nice article - thank you. Do you have thoughts on the current Private Equity narrative and sliding valuations and how it relates to Brookfield? Also thoughts on holding asset light BAM vs BN?
On BN vs BAM, this really comes down to 3 things: do you want exposure to their real estate; do you want exposure to their insurance arm; and valuation. At this point my answer to the first two is yes, and the valuation question is more balanced than it was 9 months ago but still probably in BN's favour.
As a long term investor I tend to try to filter out current "narratives" unless they feel like they could materially impair the business. On the PE front, Brookfield has very little software exposure which helps, and their realisations have stepped up significantly so they're returning capital to investors, which is PE's other big problem at the moment. So I think they are ok at this point. On the private credit side they focus on asset-backed and opportunistic and their semi-liquid structures are small, so again I don't think there's a major issue there, and in fact they may be beneficiaries of a default cycle through Oaktree. And then on the other side of the ledger, they're clear beneficiaries of AI and power demand growth as well as limited new supply in real estate, so on balance I would say they are on the front foot cyclically.
Nice article - thank you. Do you have thoughts on the current Private Equity narrative and sliding valuations and how it relates to Brookfield? Also thoughts on holding asset light BAM vs BN?
On BN vs BAM, this really comes down to 3 things: do you want exposure to their real estate; do you want exposure to their insurance arm; and valuation. At this point my answer to the first two is yes, and the valuation question is more balanced than it was 9 months ago but still probably in BN's favour.
As a long term investor I tend to try to filter out current "narratives" unless they feel like they could materially impair the business. On the PE front, Brookfield has very little software exposure which helps, and their realisations have stepped up significantly so they're returning capital to investors, which is PE's other big problem at the moment. So I think they are ok at this point. On the private credit side they focus on asset-backed and opportunistic and their semi-liquid structures are small, so again I don't think there's a major issue there, and in fact they may be beneficiaries of a default cycle through Oaktree. And then on the other side of the ledger, they're clear beneficiaries of AI and power demand growth as well as limited new supply in real estate, so on balance I would say they are on the front foot cyclically.